Finding and Evaluating Business Opportunity 5.31

In running any enterprise identifying opportunities are significant  Jeffry Timmons describes an opportunity as a product or service that has the following features:  One which creates significant value for customers by solving a significant problem  It caters to a significant unmet need for which customers are willing to pay a premium  Fits with existing capabilities of the management team  Profits will sustain for reasonable length of time 5.32

Where to look for opportunities? Two dimensions:  Where things are undergoing change?  What is happening with competitors? 5.33

Where to look for opportunities?  New knowledge or technological change  Regulatory change  Social problems  Changing tastes  Quest for convenience  Competitor behaviour 5.34

From identification to evaluation:  Complete analysis and examination of the market for the product or service  Examining the current and future competition  What is the economics of the opportunity?  Financial and other resources required 5.35

1.Analysis of the market Try to answer the following questions:  How will it benefit customers?  How many people stand to benefit? In other words, what is the size of the market?  Is the market stable or growing? If it is growing, at what annual rate?  What percentage of the total market could the product / service hope to acquire  Do competitors have a similar product or service that meets the demand?  Is the need latent, undiscovered or do customers aware of the same?  Can we define our customers? What are their characteristics? If you cannot define you have not understood the opportunity  Advantage of the product / service in relation to substitutes 5.36

2.Competitive situation  What are the strengths and weaknesses of main competitors ?  How would your competitor respond to you entering the market?  Are the barriers to entry high or low?  How quickly competitors can respond to change?  If there is one way, the competitor can damage you how can he do it?  Apply the techniques of SWOT analysis 5.37

3.Underlying economics  Will your product or service be a price setter or price taker? What are the constraints on pricing?  What is the supply/demand situation relative to your product or service?  Demand elastic or inelastic  Do customers have substitutes?  Will the business be dominated by fixed or variable costs?  How easily can prices be changed and enforced? 5.38

Exercise 1  Share your success stories  Can the case studies given to you inspire you to emulate. Go through the case studies given.  List the market opportunities available at your level. 5.39